Eli Lilly and Company (LLY)
Return on total capital
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 3,024,300 | 7,040,500 | 7,138,000 | 6,495,300 | 7,589,500 |
| Long-term debt | US$ in thousands | 28,527,100 | 18,320,800 | 14,737,500 | 15,346,400 | 16,586,600 |
| Total stockholders’ equity | US$ in thousands | 14,192,100 | 10,771,900 | 10,649,800 | 8,979,200 | 5,641,600 |
| Return on total capital | 7.08% | 24.20% | 28.12% | 26.70% | 34.14% |
December 31, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $3,024,300K ÷ ($28,527,100K + $14,192,100K)
= 7.08%
Eli Lilly and Company's return on total capital has exhibited fluctuations over the past five years. Starting at a high point of 34.14% on December 31, 2020, the return on total capital decreased to 26.70% by December 31, 2021. However, there was a slight improvement to 28.12% by December 31, 2022. The trend reversed in the subsequent years, with the return on total capital declining to 24.20% by December 31, 2023, and significantly dropping to 7.08% by December 31, 2024.
The decrease in return on total capital from 2022 to 2024 raises concerns about the company's efficiency in generating returns from its total capital employed. This declining trend may indicate challenges in effectively utilizing the company's capital to generate profits. Further analysis and investigation into the factors contributing to this decline are recommended to identify areas for improvement and enhancing overall financial performance.
Peer comparison
Dec 31, 2024